American Economic Review Vol. 82 No. 5 1992
Imperfect Competition and Basing-Point Pricing: Evidence from the Softwood Plywood Industry
Abstract
The Federal Trade Commission's action to eliminate basing-point pricing in the softwood plywood industry during the mid-1970's created a natural experiment: I find that the FTC's action had no effect on the delivered price of the base-site product (Douglas fir plywood) but decreased the delivered price of the non-base-site product (pine plywood) for many consumers. The evidence suggests that the detrimental effects of basing-point pricing for economic welfare were reflected entirely in the behavior of non-base-site firms.
- Volume
- 82
- Issue
- 5
- Pages
- 1106-1119
- Sources
- bibtex:phds-export.bib